and it would seem that the insolvency of the buyer, in order to justify the proceeding, must be evident. Goods cannot be arrested on their way to the purchaser because his ability to pay for them is doubtful, nor unless he is actually insolvent when they are stopped. But what should be deemed sufficient evidence of "insolvency" is a difficult question. It is a fact to be made out by proof, showing the inability of the vendee to meet his engagements, either by record or other evidence, such as a return of nulla bona upon an execution, the dishonor of negotiable paper, or a failure to meet other business engagements from inability to do so. By the word itself is meant a general inability to pay one's debts; and of this inability the failure to pay one just and admitted debt would probably be sufficient, and the fact that the consignee or buyer has "stopped payment" has been considered, as a matter of course, to be such an insolvency as justified a stoppage in transitu. Sec. 762. (§ 414.) Transfer of bill of lading to bona fide holder defeats rights. The right of stoppage in transitu may be defeated when the goods are represented by a bill of lading, which is a symbol of the property, and the vendee, being in possession of it by the vendor's consent, transfers it to a third person, who bona fide gives value for it.10 And it has 612, 44 N. W. Rep. 734; Fenkhausen v. Fellows, 20 Nev. 312, 21 Pac. Rep. 886; Walsh v. Blakely, 6 Mont. 194; Farrell v. Railroad Co., 102 N. C. 390; United States, etc. Co. v. Oliver, 16 Neb. 612; Loeb v. Peters, 63 Ala. 243; Bayonne Knife Co. v. Umbenhauer, 107 Ala. 496, 54 Am. St. Rep. 114, 18 So. Rep. 175; Jeffris v. Railroad Co., 93 Wis. 250, 67 N. W. Rep. 424, 57 Am. St. Rep. 919. "Actual insolvency of the vendee is not essential. It is sufficient if, before the stoppage in transitu, he was either in fact insolvent, or had, by his conduct in business, afforded the ordinary apparent evidences of insolvency. Nor is the vendor's right abridged, or in any way affected by the fact that he has received the vendee's bills of exchange or other negotiable securities for the whole price, even though they may have been negotiated and are still outstanding. Diem v. Koblitz, 49 Ohio St. 41, 29 N. E. Rep. 1124, 34 Am. St. Rep. 531. 10. Loeb v. Peters, 63 Ala. 243; Becker . Hallgarten, 86 N. Y. 167; First National Bank v. Schmidt, 6 Colo. App. 216, 40 Pac. Rep. 479. So where, at the buyer's request, been held that such an assignment defeats the right, although it may have been made after the notice to the carrier by the vendor, in the exercise of his right of stoppage, not to deliver the goods to the buyer, provided the assignee of the bill of the goods were shipped in his name as consignor to a third person, it was said that the vendor's right of stoppage was defeated. Treadwell v. Aydlett, 9 Heisk. 388. The right of stoppage in transitu exists against the vendee and all purchasers from him, until there has been an actual delivery of the goods to the vendee, or to a purchaser under his order; and until such delivery has been made and possession of the goods obtained, the title of a bona fide purchaser from the vendee, without notice, can only be made good against the exercise of such right by an assignment of the bill of lading. Branan v. Railroad Co., 108 Ga. 70, 30 S. E. Rep. 836, 75 Am. St. Rep. 26. A mere resale by the buyer without an actual delivery of the goods or an assignment of the bill of lading, therefore, does not defeat such right of stoppage. And the subsequent possession of the goods by such purchaser, acquired by means of a replevin suit, does not alter the case, notwithstand ing such purchaser may in perfect good faith have paid his money in expectation of getting the goods in question. Delta Bag Co. v. Kearns, 112 Ill. App. 269. In Railway Co. v. Heidenheimer, 82 Tex. 195, 17 S. W. Rep. 608, 27 Am. St. Rep. 861, two days before the carrier was notified to stop the goods the vendee transferred and assigned the bill of lading to a bona fide holder, who had no knowledge of the vendee's insolvency, as collateral security for a cash loan. Two days later the vendor stopped the goods in transitu and obtained possession of the goods from the carrier. The pledgee of the bill of lading sued the carrier for the value of the goods. The court said in part: "It is held by some authorities that where a bill is assigned as collateral security, the rights of the pledgee thereunder are the same as those of an actual purchaser of the goods for value, as far as the exercise of those rights is necessary for the holder's protection; and that one who makes a temporary advance to the vendee, taking the bill as his security, has the same rights as the buyer of the goods (i. e., the person who takes a bona fide transfer of the bill of lading from the vendee)." In any event it must be conceded that, if a transfer of a bill of lading by way of pledge or mortgage, or as collateral security for a loan, does not absolutely defeat the right of stoppage in transitu, the seller cannot exert that right until he has discharged the debt secured by the transfer as his right is subject to that of the mortgagee or pledgee. In the same case it was said that the purpose of issuing bills of lading in duplicate is that all parties may have an original. The duplicate therefore possesses the same characteristics as the original, so-called, retained by the lading is ignorant that such notice has been given.11 But, as we have seen,12 the indorsement and transfer of the bill of lading can give no better right to the goods than the indorser himself has, and, if it be lost or stolen, the finder or thief can confer no title, even upon an innocent third party, by a transfer to him, although it might have the indorsement of the true owner upon it, as he could do in the case of negotiable instruments. In other words, bills of lading are not negotiable in the commercial sense of that word, but, as between buyer and seller, are treated as mere symbols representing the property named in them. Its assignment can only confer such rights upon the assignee as the assignor himself had. If, therefore, the vendor has a right to stop the goods in transitu by reason of the insolvency of the vendee, the latter certainly has no right, after the notice to the carrier, to the possession of the goods, nor could the carrier suffer him to take them without becoming responsible to the vendor.13 Sec. 763. ($ 414a.) Right not defeated by attachment or garnishment by creditors of consignee. The seizure of the vendor. If the seller sends a duplicate to the vendee, and the duplicate is transferred to a bona fide purchaser, the right of stoppage in transitu is defeated. 11. Newhall v. The Railroad, 51 Cal. 345. 12. Ante, § 175. 13. In the case of Lickbarrow v. Mason, 2 T. R. 63, which is the leading case on this subject, the court of king's bench decided that, by an assignment made by the consignee for a valuable consideration, and without notice to the assignee that the goods were not paid for, the property was abso lutely transferred to the assignee, and that the vendor was deprived of the right to stop the goods in transitu. The court of exchequer chamber, however, reversed this judgment, holding that the assignment gave to the assignee no other right or title than the consignee himself possessed, and consequently that the vendor had a right to stop the goods. The judgment was brought before the house of lords, and a venire de novo was awarded upon a tech nical ground. But the court of king's bench adhered to its former decision, and the case was prose cuted no further. Since that time it has never been doubted that the judgment of the king's bench was correct. But the facts in that case showed that the buyer who had assigned the bill of lad ing had at the time both the title and the immediate right to the possession of the goods. But as soon as notice is given to the car goods before delivery at the suit of the consignee's creditors,14 or the garnishment of the carrier by such creditors, 15 will not defeat the vendor's right of stoppage. Sec. 764. (§ 414b.) Effect of attachment of goods by vendor. Whether the right is waived where the seller seizes the goods by attachment as the goods of the vendee while they are yet in transit is a question upon which the authorities are in conflict. The affirmative has been laid down as the rule by some text-writers,16 chiefly on the authority of one case,17 while the negative has been asserted in other cases.18 Sec. 765. Effect of acceptance of drafts or negotiation of notes. Neither the acceptance of an unpaid draft, nor the sending to the vendee of an account in which he is credited with the draft, nor the negotiation of notes subsequently returned to the vendor and tendered back to the vendee by the vendor will prevent the vendor from stopping the goods in transitu.19 rier, where the vendee is discovered to be insolvent, the vendor reestablishes the lien which he had before he parted with the goods, and thereby deprives the vendee of the right to their possession; and, if the assignment of the bill of lading is afterwards made, though to a person ignorant of such notice, the question would be whether the vendor could be deprived of the security thus acquired, or the assignee could be substituted to any right which his assignor did not possess, by the transfer of an instrument not negotiable. 14. Farrell v. Railroad Co., 102 N. C. 390; Estey v. Truxel, 25 Mo. App. 238; Sherman v. Rugee, 55 Wis. 346; Durgy Cement Co. v. O'Brien, 123 Mass. 12; Bayonne Knife Co. v. Umbenhauer, 107 Ala. 496; 18 So. Rep. 175, 54 Am. St. Rep. 114. 15. Chicago, etc. R. Co. v. Painter, 15 Neb. 394. So the fact that the consignee has been adjudicated a bankrupt before a delivery of the goods to him will afford the trustee in bankruptcy no right to possession of the goods as against the vendor who has exercised his right to stop the goods in transitu. In re M. Burke, 140 Fed. 971. 16. Bishop on Contracts, § 802; Wait's Act. & Def. 616. 17. Woodruff v. Noyes, 15 Conn. 335. 18. Allyn v. Willis, 65 Tex. 65, doubting Halff v. Allyn, 60 Tex. 278. 19. Brewer Lumber Co. v. Railroad Co., 179 Mass. 228, 60 N. E. Rep. 548, 54 L. R. A. 435, 88 Am. St. Rep. 375; Diem v. Koblitz, 49 Ohio St. 41, 29 N. E. Rep. 1124, 34 Am. St. Rep. 531; Rogers v. 847 Sec. 766. ($415.) Goods must be in possession of some middleman. It is essential to the exercise of the right that the goods should be at the time in the possession of a middleman, or of some person intervening between the vendor who has parted with, and the purchaser who has not yet received them. But it is not necessary that they should remain in the possesWhen the carrier combines sion of the carrier, quà carrier. with his business of common carrier that of warehouseman, if the transportation has been completed and the goods put in store, the right of the vendor still exists, and the notice to the carrier will bind him as warehouseman. In the case of water carriers and railroad companies transporting goods as common carriers, therefore, the transitus will not be considered as having come to an end, so as to defeat the vendor's right, as soon as the goods have arrived at destination and have been stored, whether such carriers be required to give notice to the consignee or not, or whether their liability be held to cease as carriers upon the arrival and warehousing the goods, without As long as the goods are in their custody, more, or not. whether as carriers or warehousemen, they must recognize the right of the vendor to stop the delivery of the goods to the vendee if he has become insolvent or has not defeated the right by an assignment of the bill of lading to a bona fide pur Minn. 464, 59 N. W. Rep. 1096; |